ASSIGNMENT OF NOTE, SECURITY AGREEMENT AND OTHER SECURITY DOCUMENTS
ASSIGNMENT OF NOTE, SECURITY AGREEMENT AND OTHER SECURITY DOCUMENTS
THIS ASSIGNMENT OF NOTE, SECURITY AGREEMENT AND OTHER SECURITY
DOCUMENTS (this "Assignment"), is made and entered into as of the 7th day of December, 2017, by TCA GLOBAL CREDIT MASTER FUND, LP, a Cayman Islands limited partnership ("Assignor"), in favor ofLCF SALONS LLC ("Assignee").
WITNESSETH
WHEREAS, Sack Lunch Productions, Inc., a Utah corporation (the "Borrower") and the Assignor executed that certain Senior Secured Credit Facility Agreement dated as of June 30, 2015 and made effective as of October 13, 2015 (the "Original Credit Agreement"), as amended by the First Amendment to Credit Agreement dated July 13, 2016 (the "First Amendment"), as further amended by that certain Second Amendment to Credit Agreement dated as of January 5, 2017 (the "Second Amendment"), and as further amended by that certain Settlement Agreement dated as of October 18, 2017 (the "Settlement Agreement") (the Original Credit Agreement, the First Amendment, the Second Amendment, the Settlement Agreement, together with any further amendments, renewals, substitutions, replacements, or modifications from time to time, collectively referred to as the "Credit Agreement") (collectively, the "Credit Agreement''); and
WHEREAS, pursuant to the Credit Agreement, Assignor is the present legal and equitable owner and holder of that certain First Replacement Convertible Promissory Note dated July 13, 2016, evidencing an aggregate amount of principal Obligations under the Credit Agreement in the amount of Two Million One Hundred Ten Thousand Seven Hundred Sixteen and 14/100 Dollars ($2,110,716.14) (such promissory note, together with any modifications, extensions, renewals, or other amendments thereof hereinafter referred to collectively as the "Note"); and
WHEREAS, pursuant to the Credit Agreement, Green Endeavors, Inc., a Utah corporation, Xxxxxx Salons, Inc., a Utah corporation, Xxxxxx Salons II, Inc., a Utah corporation, and Xxxxxx Experience Center, LLC, a Utah limited liability company (collectively, the "Released Guarantors"), among other parties, executed the Credit Agreement as "Corporate Guarantors" agreeing to guarantee the Borrower's obligations thereunder; and
WHEREAS, the Borrower's and the Released Guarantors' obligations under the Credit Agreement and the Note are secured by the following: (i) a Security Agreement dated as of June 30, 2015 and made effective as of October 13, 2015 from the Released Guarantors, among others, in favor of the Assignor (the "Security Agreement"), pursuant to which the Assignor has a continuing, first-priority, perfected security interest encumbering all of the "Collateral" (as defined in the Security Agreement) of the Released Guarantors, among others; (ii) a UCC-1 Financing Statement listing the Released Guarantors, among others, as debtors, and Assignor, as secured party, filed with the Utah Division of Corporations & Commercial Code under reference number 6190975 (the "UCC-1"); (iii) a Pledge and Escrow Agreement dated as of June 30, 2015 and made effective as of October 13, 2015 made by Green Endeavors, Inc., a Utah corporation ("Green Endeavors"), in favor of Assignor, as secured party, in which Green Endeavors irrevocably pledged l 00% of the issued and outstanding shares of the capital stock and/or membership interests to Assignor in Xxxxxx Salons, Inc., a Utah corporation, Xxxxxx Salons II, Inc., a Utah corporation, and Xxxxxx Experience Center, LLC (the "Green Endeavors Pledge Agreement"); and (iv) a Pledge and Escrow Agreement dated as of June 30, 2015 and made effective as of October 13, 2015 made by the Borrower, in favor of Assignor, as secured party, in which the Borrower irrevocably pledged 100% of the issued and outstanding shares of the capital stock and/or membership
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interests to Assignor in Green Endeavors, among other companies (the "Sack Lunch Pledge Agreement") (the Security Agreement, the UCC-1, the Green Endeavors Pledge Agreement and the Sack Lunch Pledge Agreement, and any and all other documents and instruments securing the interests of the Released Guarantors collectively hereinafter referred to as the "Ancillary Security Documents" and the Borrower's obligations under the Credit Agreement, the Note and the Ancillary Security Documents are hereinafter collectively referred to as the "Obligations"); and
WHEREAS, the parties hereto desire that Assignor assign to Assignee, its successors and assigns, One Hundred Thousand Dollars ($100,000) of the Obligations evidenced by the Note as well as the Assignor's right, title and interest in any and all security interests in the favor of the Assignor related to the Released Guarantors, which security interests are set forth in the Ancillary Security Documents, all subject to the terms and conditions hereinafter set forth; and
WHEREAS Borrower desires to join in this Assignment for the purposes of consenting and acknowledging this Assignment;
NOW, THEREFORE, in consideration of the sum of One Hundred Thousand Dollars ($100,000) of the Obligations evidenced by the Note, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged and agreed, Assignor and Assignee hereby covenant and agree as follows:
1.Recitals. The recitations set forth in the preamble of this Assignment are true and correct and incorporated herein by this reference.
2.Assignment. Assignor does hereby transfer, assign, grant, and convey to Assignee, its successors and assigns, all of the right, title and interest of Assignor in and to: (i) One Hundred Thousand Dollars ($100,000) of the Obligations evidenced by the Note; and (ii) any and all of the security interests held by Assignor in and to the Released Guarantors, which security interests are set forth in the Ancillary Security Documents, it being acknowledged that the Assignor is not assigning any right, title or interest in the security interest of any other party to the Credit Agreement whatsoever other than that of the Released Guarantors.
3.Payment. On the Effective Date, the Assignee agrees to pay Assignor, the aggregate sum of One Hundred Thousand Dollars ($100,000) (the "Payment"), by wire transfer to an account designated by Lender.
4.Release. Upon the Assignor's receipt of the Payment, the Released Guarantors shall be released by the Assignor and have no further obligations to the Assignor under the Credit Agreement or any other document executed in connection therewith, except for such obligations and indemnities of the Released Guarantors that expressly survive repayment of the Obligations under the Credit Agreement, it being acknowledged that the Assignor is not releasing any other party to the Credit Agreement other than the Released Guarantors.
5.Modification of Note. Borrower understands and acknowledges that in connection with this Assignment, it may be necessary or desirable, in Assignor's sole and absolute discretion, to have the Borrower sever, split, divide and apportion the Note to accomplish the intention set forth in this Assignment. In that regard, within no later than three (3) Business Days after request therefor is made by Assignor to Borrower from time to time, the Borrower agrees to sever, split, divide and apportion the Note and to execute and deliver such replacement notes to Assignor within such time frames as required or requested by Assignor in connection with this Assignment.
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6.Representations and Warranties of Assignor. Assignor hereby represents and warrants to Assignee that: (i) Assignor is the legal and equitable owner of Assignor's right, title and interest in and to the Note and all other Ancillary Security Documents; and (ii) Assignor has not sold, transferred or assigned the Note or any of the other Ancillary Security Documents, or any portion thereof. Except for the foregoing representation and warranty, this Assignment is made by Assignor without recourse, representation or warranty of any nature or kind, express or implied, and Assignor specifically disclaims any warranty, guaranty or representation, oral or written, past, present or future with respect to the Note, the Obligations, or any other Ancillary Security Documents, including, without limitation: (i) the validity, effectiveness or enforceability of the Note, the Obligations, or any of the other Ancillary Security Documents; (ii) the validity, existence, or priority of any lien or security interest securing the Obligations;
(iii) the existence of, or basis for, any claim, counterclaim, defense or offset relating to the Note, other Obligations, or any of the other Ancillary Security Documents; (iv) the financial condition of the Borrower, the Released Guarantors, or any other guarantor or obligor liable under the Note, the Obligations, or any of the other Ancillary Security Documents, or the ability of any such parties to pay or perfonn their respective obligations under the Note or any of the other Ancillary Security Documents; (v) the compliance of the Note or any of the other Ancillary Security Documents with any laws, ordinances or regulations of any governmental agency or other body; (vi) the value or condition of any collateral securing the Obligations; and (vii) the future performance of the Borrower, or any other guarantor or obligor liable under the Note, the Obligations, or any of the other Ancillary Security Documents. Assignee acknowledges and represents to Assignor that Assignee has been given the opportunity to undertake it"> own investigations of the Borrower, the Released Guarantors, the Note, the Obligations, and all other Ancillary Security Documents, and having undertaken and performed all such investigations as Assignee deemed necessary or desirable, Assignee represents, warrants and agrees that it is relying solely on its own investigation of the Borrower, the Released Guarantors, the Note, the Obligations. and all other Ancillary Security Documents, and not any information whatsoever provided or to be provided by Assignor, or any representation or warranty of Assignor. The assignment of the Note and the other Ancillary Security Documents as provided for herein is made on an "AS IS," "WHERE IS" basis, with all faults, and Assignee, by acceptance of this Assignment, shall be deemed to have agreed and acknowledged that Assignor has fully performed, discharged and complied with all of Assignor's obligations, representations, warranties, covenants and agreements hereunder, that Assignor is discharged therefrom, and that Assignor shall have no further liability with respect thereto, except only for those express warranties contained in this Assignment, and Assignee, by such acceptance, expressly acknowledges that ASSIGNOR MAKES NO WARRANTY OR REPRESENTATIONS, EXPRESS OR IMPLIED. OR ARISING BY OPERATION OF LAW, RELATING TO THE NOTE, THE OBLIGATIONS, OR ANY OF THE OTHER ANCILLARY SECURITY DOCUMENTS, EXCEPT AS SPECIFICALLY SET FORTH HEREIN.
7.RELEASE. ASSIGNOR, TOGETHER WITH ALL OF ITS PARTNERS AND AFFILIATES, AND THE OFFICERS, MEMBERS, DIRECTORS, PARTNERS, EMPLOYEES, AGENTS AND ATTORNEYS OF EACH OF THE FOREGOING, ARE HEREBY RELEASED FROM ALL CLAIMS, CAUSES OF ACTION AND LIABILITIES OF ANY NATURE OR KIND IN ANY WAY RELATING, DIRECTLY OR INDIRECTLY, TO THE NOTE, THE OBLIGATIONS, OR ANY OF THE OTHER ANCILLARY SECURITY DOCUMENTS, ANY COLLATERAL SECURING ANY OBLIGATIONS THEREUNDER, AND THIS ASSIGNMENT, TO THE EXTENT ARISING ON OR PRIOR TO THE DATE HEREOF, INCLUDING, WITHOUT LIMITATION, ANY AND ALL CLAIMS ARISING FROM OR RELATING TO NEGOTIATIONS, DEMANDS, REQUESTS OR EXERCISE OF REMEDIES IN CONNECTION WITH THE NOTE, THE OBLlGATIONS, OR ANY OF THE OTHER ANCILLARY SECURITY DOCUMENTS, THIS ASSIGNMENT, AND ANY AND ALL FEES OR CHARGES COLLECTED IN CONNECTION WITH THIS ASSlGNMENT.
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8.Governing Law. This Assignment shall be governed by and construed in accordance with the laws governing the Note.
9.Successors and Assigns. This Assignment shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.
10.Headings. The headings of the paragraphs of this Assignment have been included only for convenience, and shall not be deemed in any manner to modify or limit any of the provisions of this Assignment or used in any manner in the interpretation of this Agreement.
11.Interpretation. Whenever the context so requires in this Assignment, all words used in the singular shall be construed to have been used in the plural (and vice versa), each gender shall be construed to include any other genders, and the word "Person" shall be construed to include a natural person, a corporation, a firm, a partnership, a joint venture, a trust, an estate or any other entity.
12.Partial Invalidity. Each provision of this Assignment shall be valid and enforceable to the fullest extent permitted by law. If any provision of this Assignment or the application of such provision to any person or circumstances shall, to any extent, be invalid or unenforceable, then the remainder of this Assignment, or the application of such provision to persons or circumstances other than those as to which it is held invalid or unenforceable, shall not be affected by such invalidity or unenforceability.
13.Collateral. Upon the Assignor's receipt of the Payment, the Assignor agrees to: (i) file an amendment or assignment of the UCC-1 in order to assign to the Assignee the Assignor's security interest relating to the Released Guarantors in the UCC-1 as contemplated hereunder; and (ii) deliver to the Assignee the pledged securities and other transfer documents held by the escrow agent relating to the Released Guarantors under the Green Endeavors Pledge Agreement and the Sack Lunch Pledge Agreement.
14.Execution. This Assignment may be executed in one or more counterparts, all of which taken together shall be deemed and considered one and the same Assignment. In the event that any signature is delivered by facsimile transmission or by e-mail delivery of a ".pdf' format file or other similar format file, such signature shall be deemed an original for all purposes and shall create a valid and binding obligation of the party executing same with the same force and effect as if such facsimile or ".pdf' signature page was an original thereof.
[Signatures on the following page]
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IN WITNESS WHEREOF, Assignor and Assignee have executed this Assignment as of the date
above first written.
Assignor:
TCA GLOBAL CREDIT MASTER FUND, LP
By: TCA GLOBAL CREDIT FUND GP, LTD
Its: General Partner
By: /s/ Xxxxxx Press, Director
Assignee:
LCF SLAONS LLC
By: /s/ Xxxxx Fast
Name: Xxxxx Fast
Title: Manager
Borrower hereby joins in the execution of this Assignment for the purpose of acknowledging, consenting to, and agreeing to the assignment of the Note and the security interests to Assignee as contemplated by this Assignment.
Borrower:
SACK LUNCH PRODUCTIONS, Inc.
By: /s/ Xxxxxxx Xxxxxx
Name: Xxxxxxx Xxxxxx
Title: President
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